Here is a conversation that was posted in the finance forum before it closed.

“So basically after i get my pay cheque and decide to put my money into an rrsp, that money has already been taxed by the gov’t so how does it really reduce my TI vs. having your employer take the money first to put it in a rrsp for you then taking the taxes off the rest of your paycheque?”

A. You have to consider the potential rebate when u do your taxes. With your own u get to dictate where you put your rrsp investment dollars.

“Would I get a potential rebate or would you get the taxed portion back?”

A. Well it’s a formula, they (the govt) would put that into consideration. That portion you invested becomes ”untaxable”, how much percentage rebate you get I’m not sure.

“What i’m saying is, if you have $100 gross and tell your employer to invest it b/f taking taxes off of it .. you have $100 in rrsp. If you wait to do it on your own…. taxes are already taken off and now that $100 is only worth $70 (assuming 30% bracket)”

A. i believe so, but remember, you don’t tell them where you put it and you can contrbute the remaining 30 when the return comes in. So u loose a year potentially

“So then you only have $70 in rrsp… so isnt it better to just invest with your employer; but i mean is that how it works? you would get that $30 back under the title of “rebate”? so in reality it would be better off to invest via the employer immmediate pre-tax deduction than to lose out the $30 x 12 months, right? Would it be wiser to invest with my company RRSP program and get the non-taxable income deducted right away, or invest on my own by taking deductions off and getting a rebate later.

A. I’m not sure, but u have to think of it from the perspective of the 70 dollars and the return you’re getting w/ company or with a real rrsp….